Families, advocates still frustrated by nursing home's abrupt closure

Oak Terrace Healthcare Center faces a $1,100 fine, but it's not clear if the state can ever collect.

Dean Olsen Staff Writer @deanolsenSJR

There were tears and panic as residents walked and were wheeled out of Oak Terrace Healthcare Center in the hours leading up to its closure Sept. 7.

But since then, at least 20 of the residents who left the financially troubled nursing home are “adjusting very well” at other nursing homes and Springfield-area living centers, according to Megan Jizmagian, the region’s “I CARE” long-term care ombudsman.

“A lot of them are more content where they are now because it’s a more stable environment,” she said last week.

But Jizmagian, as well as other advocates for nursing home residents and the residents themselves, remain upset with the way the closure was handled and frustrated that no one may be held accountable.

The Illinois Department of Public Health fined the 98-bed facility’s license holder $1,100 in connection with the abrupt closure of Oak Terrace, 1750 W. Washington St.

But court documents indicate that license holder Kelly E. Smith of Overland Park, Kansas, and a related business, Oak Manor Properties Land Trust, owe the Illinois Department of Revenue more than $175,000, so it’s uncertain whether the relatively small fine from Illinois will be collected.

“It was just a very unfair situation,” Joni Bugett of Springfield said of the short notice before Oak Terrace’s closure. She moved her husband, former Oak Terrace resident Larry Bugett, 65, to Springfield Supportive Living, 2034 E. Clear Lake Ave.

“I just believe they knew earlier,” she said of Oak Terrace’s management.

Financial issues blamed for abrupt shutdown

Illinois law calls for at least 60 days’ notice of a nursing home closure to local and state officials, residents and family members. In Oak Terrace’s case, state officials were formally notified by the facility Sept. 5 that it would close Sept. 30.

Two days after the notification, the for-profit nursing home, which first opened in the mid-1970s under a different owner, was closed by HomeLife Companies, the Delaware, Ohio, business operating Oak Terrace on behalf of Smith.

Smith didn’t respond to a letter sent by The State Journal-Register to his business address. And he didn’t respond to a message left with Joanne Stutz, the lawyer in Shawnee, Kansas, who represented him and the nursing home in the Kansas district of U.S. Bankruptcy Court from 2011 to 2013.

Smith tried unsuccessfully to reorganize Oak Terrace’s debts in court. When the bankruptcy case was filed, Oak Terrace reported $1.4 million in debts and $152,605 in assets. Operating losses of $231,683 were reported in a seven-month period of 2012 alone, according to court documents.

In a telephone interview, Stutz wouldn’t comment on the case except to say the facility’s ongoing “financial problems” eventually led to HomeLife taking over day-to-day operations of Oak Terrace.

HomeLife officials said in a document in a Sangamon County Circuit Court case filed in early September, when 27 residents were living at the facility, that HomeLife had operated the 26,300-square-foot nursing home since August 2016.

What event may have triggered the facility’s closure last month is unclear. HomeLife said in the Sangamon County court case seeking the appointment of a receiver to operate the facility a bit longer — a case that later was dropped when the nursing home closed — that Smith’s Oak Properties Land Trust defaulted on the facility’s mortgage.

The HomeLife filing also said the U.S. Department of Housing and Urban Development, which guaranteed the mortgage loan, approached HomeLife with the loan’s lender to ask HomeLife to manage the nursing home.

HomeLife also said HUD was reimbursing HomeLife for the care of the facility’s residents, but that HUD later cut off the reimbursements.

HUD officials contradicted HomeLife’s statements.

In an email to the newspaper on Sept. 19, HUD spokeswoman Gina Rodriguez said the Federal Housing Administration, which is part of HUD, “insured the mortgage on this property but does not provide reimbursement for operating expenses. In addition, FHA is not involved in the operation of the facility, nor do we offer unsolicited direction on the day-to-day issues related to residential care.”

Residents and family members said they heard rumors of Oak Terrace’s closure for weeks but were told only the day and morning before the closure that they had to be out by the end of the day Sept. 7.

Jizmagian said she was at the nursing home in the hours before Oak Terrace closed, and observed residents and upset staff members helping the residents get on buses to leave.

One woman, who apparently had dementia, was being pushed out in a wheelchair and said, “Oh, I don’t like this, it’s not right,” according to Jizmagian.

Jizmagian said some family members of the 20 or so residents whom the ombudsman’s office has kept in contact with have complained that they paid ahead of time for their loved ones’ care for the entire month of September and haven’t been reimbursed for the care their loved ones never received.

“They don’t know who to call,” Jizmagian said.

Joni Bugett, 62, a retired vocational coordinator for School District 186, said she has been stuck with bills totaling about $500 from a transportation service that drove her husband, a retired custodian, to and from doctors’ offices while he was a resident of Oak Terrace for four months.

It was the nursing home’s responsibility to pay those bills for her husband, whose care was covered by Medicare and Medicaid, she said.

Jizmagian said she considers the state’s fine inadequate in light of the “panic” that was caused the day of the closing, but she doesn’t know what more can be done.

The state can pursue payment of a fine in court, but Public Health spokeswoman Melaney Arnold wouldn’t say what the state’s next step would be.

Jizmagian said: “I feel someone needs to be held accountable. Money problems don’t just happen overnight. It’s really unfair to family members and residents that they had to suffer at the end.”

Jamie Freschi, the state’s long-term care ombudsman, said: “It’s problematic when facilities close like that. It’s just awful. I don’t know the answer right now.”

Eleven of the remaining Oak Terrace residents now are living at Regency Care, 2120 W. Washington St., Springfield. Another nine are at Vonderlieth Living Center in Mount Pulaski.

Others went to facilities that include Springfield Supportive Living and Lewis Memorial Christian Village, both in Springfield, and Sunny Acres Nursing Home in Petersburg, Jizmagian said.

Anthony Twardoski, administrator of Regency, and Kynda Buenrostro, administrator of Vonderlieth, said the former Oak Terrace residents are adjusting well.

“They seem to be very happy to be here,” Twardoski said.

Even though Jizmagian said she didn't know of any Oak Terrace residents whose health declined as a result of the closure, studies indicate that "transfer trauma" can hasten the decline and death of certain nursing home residents, especially those with dementia, according to Wendy Meltzer, executive director of Illinois Citizens for Better Care.

Meltzer said state law isn't tough enough to discourage nursing home owners from violating the rules and closing a facility quickly. Criminal penalties should be considered by the General Assembly for such cases, she said.

"The likelihood is that this is killing people," she said.

Timothy Voss, an Oak Terrace dietary aide who was laid off when the facility closed, said he has received all the pay he was due, but is angry at the way HomeLife treated workers and residents.

He doubts that the state’s regulators will get justice for those wronged by Oak Terrace and HomeLife.

“There are state rules and laws, but there are always ways to get around them,” Voss said. “They hurt a lot of people.”

Voss, 61, remains unemployed. He worked for Oak Terrace six months and said he wondered how the facility could afford to install a new refrigerator and clothes dryer while he was there.

When she first moved in, she said the facility had little money to spend on activities for residents and only recently had begun to accept Medicaid. Before that, it had only accepted private payments, she said.

Fuller, who is divorced and has no children, said she enjoyed the friendships she made among the residents at Oak Terrace.

“We were a happy family,” Fuller said. “It was a small nursing home. We were sad to see all the people go.”

She, too, said she heard the rumors about a closure. She said she knew something was up when the nursing home’s administrator, director of nursing and social worker all left their jobs a few weeks before the last day.

Fuller commended Oak Terrace’s nursing staff for sticking around to the end and showing that they cared about the residents. She said she was the last resident to leave Oak Terrace.

At Springfield Supportive Living, the building is nicer, the food is better, the staff is attentive, and there are more activities for residents, she said.

The sting of Oak Terrace’s closure hasn’t faded for her, though.

“It still is stressful,” she said. “It’s hard to get to know people again. … Everybody’s in a better place, so maybe it happened for a reason.”

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